A Change is Coming on Climate Change to NJ Governor’s Office
Three times since Gov. Chris Christie withdrew New Jersey from a regional climate-change emissions cap-and-trade effort, he’s had to veto legislative efforts to put it back in the program.
“The third time will not be the charm,” Christie said in a veto message last month.
The fourth time might be, though. Both of the major-party candidates running to replace him – Republican Lt. Gov. Kim Guadagno and Democrat Phil Murphy – say they support returning New Jersey to the Regional Greenhouse Gas Initiative, which the state helped create, then walked away from in 2011.
Christie called RGGI a failure and the bill “nothing more than an unnecessary, politically motivated tax increase” in his most recent veto.
But Ed Lloyd, director of Columbia Law School’s Environmental Law Clinic and a trustee for The Fund for New Jersey, said one good reason to be in RGGI is that it generates money for things such as energy efficiency, solar and wind power programs.
“RGGI is not simply a set of standards. It’s more than that,” Lloyd said. “The money generated from the allowances gives states resources to do additional environmental programs. New York, other states, the other states that remain in RGGI, have done that for years. We’ve lost out on that.”
Sara Bluhm of the New Jersey Business & Industry Association says carbon dioxide emissions in New Jersey are already below 2020 goals – even though the state left RGGI nearly six years, and without the extra costs the program entails by forcing energy producers to purchase emissions allowances.
“We’ve been able to cut emissions without participating in the program. There’s no need to artificially increase prices for ratepayers when there’s no environmental benefits,” Bluhm said.
Bluhm said two new natural gas being built in the state will help because they produce two to three times less CO2 emissions that coal-fired plants.
And Bluhm said New Jersey’s energy sector already is among the nation’s cleanest and by far the cleanest in the PJM Interconnection region of 13 states and D.C. that includes New Jersey.
New Jersey’s electric generation plants are tied for second in the nation for lowest sulfur dioxide emission rates, are 10th for lowest carbon dioxide emission rates and tied for first in the nation for lowest nitrogen oxide emission rates, Bluhm said.
“So by joining RGGI, all we’re doing is artificially increasing the cost, but not necessarily cutting our emissions,” Bluhm said.
RGGI called for annual 2.5 percent cuts in emissions through 2020. Meeting the goals for 2030 of the Clean Power Plan – a federal policy put in place under President Barack Obama, now under review by President Donald Trump’s administration and defunded under his proposed budget – would require future cuts of 5 percent annually.
“I’m not sure we’re meeting the goals, but if we are, God bless us,” Lloyd said. “But the RGGI program works with other states, generates funds to fund a lot of the things that we’re recommending in energy efficiency, solar, wind power. So it’s not just protections of the environment. It is generating funds to allow us to develop some of these programs we’ve talked about so that in the future, we’ll do better.”
Bluhm said the state already gets money for those purposes through a ‘societal benefits charge’ on gas and electric bills.
Nearly half the money spent from the clean energy fund in the last seven years, almost $1.25 billion, went into the state’s general fund, rather than clean-energy programs. It’s used by the state to pay for its utility cost and those of New Jersey Transit, as well as manage parks.
“That doesn’t spend all of the collected dollars intended for energy efficiency and renewables, so why would we set up another tax on consumers for that purpose?” Bluhm said.
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Bluhm said 24 percent of an electric bill today reflects government-imposed taxes and fees.
Fiscal analysts from the Office of Legislative Services estimate that being in RGGI would generate $36 million in annual revenues, though that amount fluctuates greatly. The proceeds would be used for things such as supporting commercial, industrial and institutional energy efficiency projects and reducing electricity demand among lower-income, urban ratepayers.
In the three years that New Jersey participated in RGGI, 2009 to 2011, the state collected $113.3 million in total proceeds from its RGGI auctions.
New Jersey joined the cap-and-trade program under a 2007 law, to meet the goals of the 2007 Global Warming Response Act, which calls for reducing carbon pollution 80 percent by 2050.
Carbon dioxide emissions are capped in participating states. Companies then purchase credits for their emissions. The number of allowances decreases over time, to reduce emissions.
Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island and Vermont are in RGGI. Christie has cited Pennsylvania’s absence from it as a competitive disadvantage that hurt New Jersey.